Central Pacific Financial Corp. (CPF, Financial) filed Quarterly Report for the period ended 2010-06-30.
Central Pacific Financial Corp. has a market cap of $48 million; its shares were traded at around $1.58 with and P/S ratio of 0.2. CPF is in the portfolios of Chuck Royce of Royce& Associates.
During the second quarter of 2010, we reported a net loss of $16.1 million, or $0.60 per diluted share, compared to a net loss of $160.2 million, or $5.36 per diluted share, reported in the first quarter of 2010 and a net loss of $34.4 million, or $1.27 per diluted share, reported in the second quarter of 2009. Total credit costs, which includes the Provision, write-downs of loans classified as held for sale, write-downs of foreclosed property and the change in our reserve for unfunded loan commitments, decreased to $21.8 million for the quarter, compared to $66.5 million in the first quarter of 2010 and $79.9 million in the second quarter of 2009. The net loss for the first half of 2010 was $176.3 million, compared to a net loss of $31.8 million for the comparable prior year period. As described above, the net loss recognized for the first quarter and first half of 2010 included a non-cash goodwill impairment charge of $102.7 million.
The following table presents annualized returns on average assets, average shareholders equity, average tangible equity and basic and diluted earnings per share for the periods indicated. Average tangible equity is calculated as average shareholders equity less average intangible assets, which includes goodwill, core deposit premium, customer relationships and non-compete agreements. Average intangible assets were $23.8 million and $74.6 million for the three and six months ended June 30, 2010, respectively, and $179.4 million and $179.7 million for the comparable prior year periods.
Historically, real estate lending has been a primary focus for us, including construction, residential mortgage and commercial mortgage loans. As a result, we are dependent on the strength of Hawaii s real estate market. According to the Honolulu Board of Realtors, Oahu unit sales volume increased 32.5% for single-family homes and 46.0% for condominiums for the six months ended June 2010 compared to the six months ended June 2009. Median sales price for single-family homes on Oahu for the six months ended June 2010 was $585,000, representing an increase of 2.6% from the prior year. Median sales price for condominiums on Oahu for the six months ended June 2010 remained unchanged from the prior year at $305,000. Expectations from local real estate experts and economists are for the Hawaii real estate market to show improvement during the latter part of 2010, however, there is no assurance that this will occur. As part of our plans to reduce our credit risk exposure and operate as a smaller bank, we have taken and will continue to take, steps to reduce our commercial real estate and construction loan portfolios. We ceased commercial real estate lending on the mainland in April 2008, limited commercial real estate lending in Hawaii starting in January 2009 and have not made any new construction loans in Hawaii since June 2009. In addition, as part of the recovery plan, we are significantly reducing our lending activities in commercial real estate loans and management has sold, and continues to sell, real estate secured assets both in Hawaii and on the mainland.
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Central Pacific Financial Corp. has a market cap of $48 million; its shares were traded at around $1.58 with and P/S ratio of 0.2. CPF is in the portfolios of Chuck Royce of Royce& Associates.
Highlight of Business Operations:
At December 31, 2009, we used a weighted-average discount rate of 5.9% and an expected long-term rate of return on plan assets of 8.0%, which affected the amount of pension liability recorded as of year-end 2009 and the amount of pension expense to be recorded in 2010. For both the discount rate and the asset return rate, a range of estimates could reasonably have been used which would affect the amount of pension expense and pension liability recorded. A 0.25% change in the discount rate assumption would impact 2010 pension expense by less than $0.1 million and year-end 2009 pension liability by $0.8 million, while a 0.25% change in the asset return rate would impact 2010 pension expense by less than $0.1 million.During the second quarter of 2010, we reported a net loss of $16.1 million, or $0.60 per diluted share, compared to a net loss of $160.2 million, or $5.36 per diluted share, reported in the first quarter of 2010 and a net loss of $34.4 million, or $1.27 per diluted share, reported in the second quarter of 2009. Total credit costs, which includes the Provision, write-downs of loans classified as held for sale, write-downs of foreclosed property and the change in our reserve for unfunded loan commitments, decreased to $21.8 million for the quarter, compared to $66.5 million in the first quarter of 2010 and $79.9 million in the second quarter of 2009. The net loss for the first half of 2010 was $176.3 million, compared to a net loss of $31.8 million for the comparable prior year period. As described above, the net loss recognized for the first quarter and first half of 2010 included a non-cash goodwill impairment charge of $102.7 million.
The following table presents annualized returns on average assets, average shareholders equity, average tangible equity and basic and diluted earnings per share for the periods indicated. Average tangible equity is calculated as average shareholders equity less average intangible assets, which includes goodwill, core deposit premium, customer relationships and non-compete agreements. Average intangible assets were $23.8 million and $74.6 million for the three and six months ended June 30, 2010, respectively, and $179.4 million and $179.7 million for the comparable prior year periods.
Historically, real estate lending has been a primary focus for us, including construction, residential mortgage and commercial mortgage loans. As a result, we are dependent on the strength of Hawaii s real estate market. According to the Honolulu Board of Realtors, Oahu unit sales volume increased 32.5% for single-family homes and 46.0% for condominiums for the six months ended June 2010 compared to the six months ended June 2009. Median sales price for single-family homes on Oahu for the six months ended June 2010 was $585,000, representing an increase of 2.6% from the prior year. Median sales price for condominiums on Oahu for the six months ended June 2010 remained unchanged from the prior year at $305,000. Expectations from local real estate experts and economists are for the Hawaii real estate market to show improvement during the latter part of 2010, however, there is no assurance that this will occur. As part of our plans to reduce our credit risk exposure and operate as a smaller bank, we have taken and will continue to take, steps to reduce our commercial real estate and construction loan portfolios. We ceased commercial real estate lending on the mainland in April 2008, limited commercial real estate lending in Hawaii starting in January 2009 and have not made any new construction loans in Hawaii since June 2009. In addition, as part of the recovery plan, we are significantly reducing our lending activities in commercial real estate loans and management has sold, and continues to sell, real estate secured assets both in Hawaii and on the mainland.
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